PARTNERSHIP FORMATION

1. Edwin and Darren have decided to form a partnership. Edwin contributes P80,000 cash and
merchandise inventory with a current market value of P17,000. Darren contributes P2400 cash and
office furniture with a current market value of P3200.

When journalizing these transactions _____

Office Furniture will be debited for P3200

If the partners decide to have equal interest in the partnership and the total actual contributions is equal
to total agreed capital, which statement is true?
There is bonus

2. Alana & Ansley enter into a partnership agreement in which Alana will be given 60% interest in capital
and profits. Alana contributes the following:
Land - P500,000 ?
Building - 5,000,000 fair value is 60% of its cost
Equipment - 1,000,000 fair value is 75% of its cost
There is P1,000,000 mortgage on the building which the partners agreed to assume.
The partners agreed that the total partnership capitalization should be P6M.

Alana, Capital should be credited for

P3,600,000

How much should be Ansley’s agreed capitalization?

P2,400,000

Land should be recorded in the amount of

P850,000